But the EEF warned the government’s decision to use LSC staff to run the new agencies would result in little more than a name change, failing to create the revolution needed to make the skills system more demand-led for employers.

In a letter to skills minister Kevin Brennan, seen by Personnel Today, the EEF hit out at the government for not creating the SFA in particular as a “substantially different body” to what already exists.

Nigel Fletcher, skills policy adviser at the EEF, told the magazine the chief executive and board of the SFA would be former LSC directors, while evidence given at a Business, Innovation and Skills Select Committee meeting yesterday indicated only three out of 3,200 LSC staff were yet to be assigned new posts within the agencies.

He said: “Our concern is [the SFA] is supposed to be a new funding agency with a different ethos to the LSC, and it does raise questions about how the change of culture will take place if it is the same people doing the same jobs.

“It certainly risks looking as though this is not as substantial a change as it should be.”

He added: “The LSC being disbanded and being replaced is a huge opportunity to create a properly demand-led system, and part of the reason for us raising this now is this is not an opportunity that can and should be missed.

“It would be a missed opportunity if the restructuring isn’t used to create a more responsive system.”

Speaking at the select committee, David Cragg, the interim chief executive of the SFA, said the transfer of the majority of the LSC’s staff to the new agencies had been a “great achievement”. However, he warned job cuts could be made over the next 12 months.

He said: “We expected possibly a public cost of redundancy, but we’ve not ended up with a public cost and we will manage the efficiencies that will be required by us administratively over the next 12 months. We may not have achieved efficiencies in the transition, but we will unquestionably achieve them in the next 12 months.”

A spokesman for the Department for Business, Innovation and Skills insisted the new skills agencies were fit for purpose. He said: “The SFA will be a completely different type of organisation to the LSC, with a different structure. It is important to ensure we do not lose the strong knowledge and experience that has already been built up by existing members of staff in this area.”